Tim Herring crunches the numbers on home battery storage. By Tim Herring
WHEN we bought our house, it had an old, small solar system (over 10 years old) which didn't work very well. After the start of the Ukrainian war, shortages caused gas and coal prices to increase significantly and flooding in Australian east coast coal mines helped keep the prices high. We decided to put in a new solar system of sufficient size and battery capacity to make a reduction of at least 60 per cent in our annual electricity bill - at that time around $2200 per annum.
I got four quotations from local suppliers in October/November last year. The industry norm is to quote only the final figure for the system, but I had insisted on a breakdown of prices for each item. I noticed that most providers were leading with solar only (no battery) and I figured out why pretty quickly – the "basic" system of 5-6kW was being quoted as "free" after subsidies. This was undoubtedly attractive, but didn't stand up to proper examination. There were two subsidies (Solar Vic PV and STCs) totalling around $5,000, plus a "subsidy" of $6,000 which was actually an interest-free loan – requiring repayment, albeit at zero interest. Hence the very low prices.
WHEN we bought our house, it had an old, small solar system (over 10 years old) which didn't work very well. After the start of the Ukrainian war, shortages caused gas and coal prices to increase significantly and flooding in Australian east coast coal mines helped keep the prices high. We decided to put in a new solar system of sufficient size and battery capacity to make a reduction of at least 60 per cent in our annual electricity bill - at that time around $2200 per annum.
I got four quotations from local suppliers in October/November last year. The industry norm is to quote only the final figure for the system, but I had insisted on a breakdown of prices for each item. I noticed that most providers were leading with solar only (no battery) and I figured out why pretty quickly – the "basic" system of 5-6kW was being quoted as "free" after subsidies. This was undoubtedly attractive, but didn't stand up to proper examination. There were two subsidies (Solar Vic PV and STCs) totalling around $5,000, plus a "subsidy" of $6,000 which was actually an interest-free loan – requiring repayment, albeit at zero interest. Hence the very low prices.
At my time of life, the last thing I needed was a new loan, even at those interest rates. I did all the sums and decided on a larger system with a battery which should meet our requirements. I ordered solar panels of 10.8kW maximum output for $7,500, a hybrid inverter (explained below) for $3,500 and two batteries totalling 13.7kWh for $10,500, plus installation and labour for $5,500 - less $5,000 rebates = $22,000 (all inc. GST).
I reckoned if we could get $1500 off our bill each year, that would give us 6.8% return on investment (RoI), which was about 50% more than the bank would give me at the time.
The installers came on December 19 and 20 2023 and did a great job!
System design
What sold me on this system was the degree of integration. It was all from the same manufacturer and designed to work together seamlessly. The hybrid inverter was only rated to supply 5kW to the house, which confused me a little until it was explained. The other 5-6kW from the roof would charge the battery at the lower-voltage DC directly. This is more efficient because other (non-hybrid) converters would have to convert the DC to 230vAC then the batteries would have to re-convert it back to low voltage DC to charge – losing efficiency and power as they do so.
The other main benefit is in the case of loss of mains power (such as after the February storm), the system could be configured to continue working with power from the roof and from the battery, as it would automatically isolate itself from the grid (a legal, safety requirement in a blackout, otherwise power technicians would be at risk from stray currents in the mains supply wires).
The installers came on December 19 and 20 2023 and did a great job!
System design
What sold me on this system was the degree of integration. It was all from the same manufacturer and designed to work together seamlessly. The hybrid inverter was only rated to supply 5kW to the house, which confused me a little until it was explained. The other 5-6kW from the roof would charge the battery at the lower-voltage DC directly. This is more efficient because other (non-hybrid) converters would have to convert the DC to 230vAC then the batteries would have to re-convert it back to low voltage DC to charge – losing efficiency and power as they do so.
The other main benefit is in the case of loss of mains power (such as after the February storm), the system could be configured to continue working with power from the roof and from the battery, as it would automatically isolate itself from the grid (a legal, safety requirement in a blackout, otherwise power technicians would be at risk from stray currents in the mains supply wires).
A sub-set of electrical appliances in the house is created as part of the installation, which includes power in the kitchen (kettle, coffee maker, airfryer, etc., but NOT oven and cooktops), fridges, freezers, much of the lighting, the internet and a TV or two. All of these would be supported by the solar and battery in the event of a loss-of-power from the grid.
During the February storm we lost mains power for a few days, but all our protected devices stayed on. Each morning the sun came up and re-charged the battery, which had powered our appliances all night as needed.
(We lost the internet anyway as the NBN fibre-to-the-node (FTTN) needs mains power in the pits, which was lost. In March we got fibre-to-the-home at zero cost (yes, NBN is doing that now!). FTTH needs no local power, except in the home.)
The new system works well, but I have noticed that in the winter months, when the sun is lower in the sky, we get much less power from the panels and the battery often fails to charge up. That means we use more mains power – but have we met our 60% target?
Economics
After the first eight months (January to August), the rather good statistics that the system provides gives the picture:
If we had no solar/battery and bought it all at the average price ($0.259 per kWh from Mycelia - using the new prices from July 2024 - although these are about to change), our consumption would have cost $1,788 (I have excluded the Daily Tariff so we can compare electricity only). Multiplying by 1.5x to equate to a full year it would be $2,682.
Calculating for what we imported, less export = $363 and 1.5x this would be $544 per year. (The savings will also improve if the rate per kWh later increases.)
That means our annual saving is around $2,138 per year or a return of 9.7% on our investment of $22,000. Better than my super!
During the February storm we lost mains power for a few days, but all our protected devices stayed on. Each morning the sun came up and re-charged the battery, which had powered our appliances all night as needed.
(We lost the internet anyway as the NBN fibre-to-the-node (FTTN) needs mains power in the pits, which was lost. In March we got fibre-to-the-home at zero cost (yes, NBN is doing that now!). FTTH needs no local power, except in the home.)
The new system works well, but I have noticed that in the winter months, when the sun is lower in the sky, we get much less power from the panels and the battery often fails to charge up. That means we use more mains power – but have we met our 60% target?
Economics
After the first eight months (January to August), the rather good statistics that the system provides gives the picture:
- Production from the solar panels 6,640kWh
- Consumption around the home & garden 6,903kWh
- Bought-in from the grid 1,616kWh; exported back to the grid 1,232kWh
If we had no solar/battery and bought it all at the average price ($0.259 per kWh from Mycelia - using the new prices from July 2024 - although these are about to change), our consumption would have cost $1,788 (I have excluded the Daily Tariff so we can compare electricity only). Multiplying by 1.5x to equate to a full year it would be $2,682.
Calculating for what we imported, less export = $363 and 1.5x this would be $544 per year. (The savings will also improve if the rate per kWh later increases.)
That means our annual saving is around $2,138 per year or a return of 9.7% on our investment of $22,000. Better than my super!